BNEF forecasts EVs to hit 54% of new car sales by 2040; decreasing importance of PHEVs
06 July 2017
Electric vehicles will make up the majority of new car sales worldwide by 2040, and account for 33% of all the light-duty vehicles on the road, according to a new forecast published by Bloomberg New Energy Finance (BNEF). This represents an aggressive jump compared to BNEF’s previous forecast of 35% EV new car market share by 2040. Under the new forecast, EVs will displace 8 million barrels of transport fuel per day and add 5% to global electricity consumption (1,800 TWh by 2040 up from 6TWh in 2016).
The forecasters said that while plug-in hybrid electric vehicle (PHEV) sales will play a role in EV adoption from now to 2025, puer battery-electric vehicles (BEVs) will subsequently take over and account for the vast majority of EV sales. The engineering complexity of PHEV vehicle platforms, their cost and dual powertrains make BEVs more attractive over the long-run, BNEF said. BNEF suggested that only in Japan will PHEVs continue to play an important role after 2030.
The forecast, put together by the advanced transport team at BNEF, relies on likely future reductions in price for lithium-ion batteries and of prospects for the other cost components in EVs and internal combustion engine vehicles. It also factors in the rising EV commitments from automakers and the number of new EV models planned.
We see a momentous inflection point for the global auto industry in the second half of the 2020s. Consumers will find that upfront selling prices for EVs are comparable or lower than those for average ICE vehicles in almost all big markets by 2029.—Colin McKerracher, lead advanced transport analyst at BNEF
The forecast shows EV sales worldwide growing steadily in the next few years, from the record 700,000 seen in 2016 to 3 million by 2021. At that point, they will account for nearly 5% of light-duty vehicle sales in Europe, up from a little over 1% now, and for around 4% in both the US and China.
However, the real take-off for EVs will happen from the second half of the 2020s when, first, electric cars become cheaper to own on a lifetime-cost basis than ICE models; and, second—arguably an even more important moment psychologically for buyers—when upfront costs fall below those of conventional vehicles.
Since 2010, lithium-ion battery prices have fallen 73% per kWh. Manufacturing improvements and more than a doubling in battery energy density are set to cause a further fall of more than 70% by 2030, BNEF forecasts.
The result will be rapidly rising market shares for electric vehicles in the biggest markets, even with oil prices staying low. BNEF sees them accounting for nearly 67% of new car sales in Europe by 2040, and for 58% in of sales in the US and 51% in China by the same date. Countries that have made early progress in EV uptake are expected to be among the leaders in 2040, including Norway, France, and the UK. Emerging economies such as India are forecast not to see significant EV sales until the late 2020s.
Jon Moore, chief executive of BNEF, said that that growth in EV market share will proceed in tandem with the shift of the power system towards cleaner, more distributed generation. “This means that not only do EVs surge, but their emissions profile improves over time.”
BNEF’s forecast is based squarely on the relative economics of EVs and ICE cars. It assumes that current policies to encourage EV take-up continue until their scheduled expiry, but does not assume the introduction of any fresh measures. BNEF analyzed the auto market not just by country but also by segment, encompassing everything from small run-arounds to SUVs and large family cars.
There is a credible path forward for strong EV growth, but much more investment in charging infrastructure is needed globally. The inability to charge at home in many local and regional markets is part of the reason why we forecast EVs making up just over a third of the global car fleet in 2040, and not a much higher figure.—Salim Morsy, senior analyst on BNEF’s advanced transport team and lead author
The team also forecast that the impact of autonomous driving will be limited in the next 10 years but will play an increasing role in the market after 2030, with 80% of all autonomous vehicles in shared applications being electric by 2040 due to lower operating costs.
We should ban production of all diesel cars by 2025 and ban production of all gasoline cars by 2030. However, R&D in combustion engines should be banned starting in 2020 in order to force the auto industry to focus their resources on making zero emission vehicles. Polluting products of any kinds should not be legal to make when there are non-polluting alternatives. Banning polluting products is better policy than subsidising non-polluting products. It is much easier to implement a ban than a subsidy.
Posted by: Account Deleted | 06 July 2017 at 08:28 AM
Banning all ICVEs would be legally difficult but it could be done selectively, starting with vehicles doing less than 50 mpg by 2025 and than all ICEVs doing less than 60 mpg by 2030 and so on every 5 years.
Of course, interim solutions like HEVs and PHEVs will be phased out in favour of BEVs and FCEVs.
Posted by: HarveyD | 06 July 2017 at 11:30 AM
Hey fellas What is it with this "banning" stuff. We should always try to avoid "banning/compulsion" whenever possible.People find it offensive/fasistic and it is counterproductive.
Particulaly when there are simple solutions like,
1:Raise taxs on HC fuels(like is done in many countries)
2:Sales tax based on the lifetime polution of the machine (include boats/planes/trains/etc).
3:Insert your solution.
Posted by: bman | 06 July 2017 at 07:55 PM
Money talks BS walks. Need to redefine what a gas guzzler is. Combined MPG < 30 is a guzzler!
so... (30 - CMPG) X $500.
That should make choosing the hybrid version of the car/cuv you like very simple.
Posted by: TonyD | 07 July 2017 at 07:56 AM
I said clearly long time ago that we shouldn't ban anything and let the free market win so we gonna be sure that we can buy the best available car. Each and all blogger opposing the free market is just a leftist like the ones having endorced the paris agreement. Only trump and pruitt have rejected the paris cc agreement.
Posted by: gorr | 10 July 2017 at 07:15 AM
Smoking, diesel and gasoline vehicles, CPPs and NGPPs, insecticides, herbicides, many food coloring and preservatives, industrial food and a multitude of industrial products will have to be curtailed or banned and we and nature are going to survive?
There is nothing wrong with banning what is bad for us and nature. It is an obligation?
Posted by: HarveyD | 15 July 2017 at 02:14 PM